Police in Rotterdam have arrested a 30-year-old after a Kalashnikov AK-47 rifle was found with two full magazines in his apartment.
The man is suspected of planning a terrorist attack, Dutch prosecutors have said.
Detectives searched the man's apartment after receiving a tip-off from intelligence agency AIVD, prosecutors said. Four boxes of highly explosive illegal fireworks were also found.
"He is suspected of preparing a terrorist crime," the prosecutors said in a statement.
A large image of the flag of the so-called Islamic State jihadist group was also found.
The Netherlands' terrorism threat level has been at one below the highest level since March 2013, meaning that officials believe there is a realistic chance of an attack.
As in many European countries, intelligence officials have repeatedly warned of the threat posed by Dutch citizens who have returned from fighting alongside the IS group in Iraq and Syria.
The investigation was "still in full progress," national prosecution spokesman Wim de Bruin said.
"At this moment we have only one suspect," he said, adding that he could not rule out further arrests.
He did not expect prosecutors to release further details today.
After attacks by Islamist militants in France, Belgium and Germany, the Netherlands is considered a potential target, because it supports US-led military operations against IS in Syria and Iraq.
